Municipal hospitals skew payrolls of Massena, Lewis County

A report published today by a state watchdog think tank shows how municipally owned hospitals skew the costs of employment in the state’s towns and counties.

Sitting strikingly at or near the top of the lists of municipal payrolls in non-metropolitan New York areas are Lewis County and the town of Massena. Regionally, the top 11 highest paid municipal employees are on the payroll of either Massena Memorial Hospital, or Lewis County General Hospital.

The numbers are of significance, some local officials say, because they point to the onerous cost to the taxpayers of supporting high professional salaries within the state’s retirement system.

Leading the list of Northern New York municipal employees is Massena Memorial Hospital administrator Charles F. Fahd II, whose $288,443 salary as a town employee is 15th highest in the state, and by far the highest in the region.

The next 10 on the regional list are all doctors, and all are paid $255,000 annually, accord to the Empire Center report.

Seven of the 10 are employees of Lewis County through its hospital, and three are on the staff of Massena Memorial and employees of the town.

According to Lewis County General Hospital’s website, three of the seven doctors listed specialize in obstetrics and gynecology; the remaining have specialties in osteopathic surgery, emergency medicine, anesthesiology and general surgery/wound care.

Massena doctors on the list practice internal medicine, nephrology and general surgery/wound care.

Lewis County manager Elizabeth Swearingin said that the pension costs the hospital is obliged to pay under municipal ownership are an ongoing problem, and the county ranking so high on the list of employee costs is emblematic of that problem.

“I was not surprised at the numbers,” Ms. Swearingin said. “But so far, my focus has been a little more global as we try to make the hospital a fiscally sound operation.”

She said the hospital has taken steps to rein in the pension costs by changing the way it hires medical staff. Since early 2013, new doctors have become employees of Lowville Medical Practice LLC, which is still controlled by the hospital but allows it to place its employees in a private pension plan that is less expensive than the state retirement system. When the subsidiary was formed, the hospital board of managers elected not to transfer professionals already in the state system into the new limited liability company, so they are all still county employees.

A call for comment from Lewis County General CEO Eric R. Burch was not returned.

In Massena, Mr. Fahd and three doctors are on the list of the 11 highest paid municipal employees in the region. Because of the hospital payroll, the town of Massena has the third highest average pay rate — $52,268 — in the state, behind the suburban New York town of Ramapo, and Oyster Bay on Long Island.

Massena Memorial Hospital’s board of directors is now pushing an effort to become a private nonprofit facility, which would remove it from town ownership and remove its considerable payroll from both the town rolls and the state retirement system. The hospital’s board has said that such a move is critical to the hospital’s survival, but some town officials have yet to embrace the idea.

Supervisor Joseph D. Gray said Thursday that the numbers put out in the Empire Center report could open some eyes for public officials and town taxpayers.

“When you take the numbers in context, it’s understandable. The hospital has high paying professional jobs — surgeons, the administrator — that push the numbers up,” Mr. Gray said. “The town as a whole, without the hospital numbers, probably has a payroll that is average or a little below average.”

Mr. Gray said that the popular trend for doctors is to seek “turn-key” agreements with hospitals, in which they become hospital employees rather than just affiliated doctors. That trend has brought escalating costs for hospitals, in part because of the rising cost of fringe benefits.

“A state pension is a huge benefit,” Mr. Gray said. “The contributions are small and short-term for the employee.”

Mr. Gray said that some doctors who come to rural areas are doing so on a three-year commitment under a federal government program that helps them pay off their college loans. When the commitment is done, if the doctor moves on from Massena Memorial, the hospital has made stiff retirement payments into the system that will never be returned.

The numbers help provide some clarity to the Massena situation, Mr. Gray said.

“If we don’t solve this problem, it’s going to fall on the taxpayers,” he said. “The stark reality is, we don’t have the deep pockets to sustain (the hospital).”

A call to Mr. Fahd requesting comment was not returned.

The Empire Center report also measured police and firefighter payrolls separately, since those employees are in a different state retirement program. Massena taxpayers got a double whammy, as its village police and fire average salaries are the highest in the region at $67,943 for the 30 police and fire employees.

The village of Potsdam also made the list twice, ranking fourth in average salary at $44,588 for 51 village employees, and fourth for police and fire pay, at an average of $64,621 for its 14 police and firemen.

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